About 12 million people stopped working in Mexico during April

Statistical Institute survey confirms pandemic hit on formal and informal jobs during quarantine

The coronavirus pandemic has hit both formal and informal jobs in Mexico, according to data published Monday by the National Institute of Statistics and Geography (Inegi). At least 12 million people left the workforce in April: all of them stopped receiving income and are still uncertain as to whether their occupation will be available with the opening of the economy. This information confirms a scenario for the Mexican economy in which growth will be negative this year and in which unemployment will take on an important dimension in the reality of the Latin American country.

The Inegi data focus on the occupation of people in Mexico, so it does not distinguish whether the jobs of the respondents are formal – with benefits and social security – or informal. The estimates, however, offer an overview of the population that is unemployed: 2.1 million people. This represents 4.7% of the economically active population who do not have a job and are actively looking for it. A couple of weeks ago, the Mexican Social Security Institute (IMSS) announced that Mexico lost half a million formal jobs in April, out of a labor market of 20.5 million people with formal employment.

The closure of the Mexican economy to prevent the spread of the covid-19 epidemic, in addition, has passed the bill to the informal economy. This underground pillar that has prevented the population of Mexico from suffering mass unemployment has decreased by 8% in the last month and has stood at 47.7%. “The informal population left the labor market and is now a non-economically active population with availability to work. This decrease also reflects the temporary suspension of activities and the wait to resume them ”, explains the Inegi in its report. In recent decades, informal employment in Mexico has grown significantly and has represented a buffer mechanism to avoid the collapse of the economy.

The loss of employment was taken for granted due to the exceptional slowdown in the global economy, however, the first data shows the fragility of the labor market in Mexico. Recovery in the coming years and months will depend on the actions taken by the Mexican Government. The president, Andrés Manuel López Obrador, has insisted that his plan does not include the rescue of companies or economic sectors, but rather that the recovery of the labor market will be done through social programs and infrastructure projects. The president has doubled the wager recognizing that the pandemic can generate the loss of up to a million jobs this year, but assuring that his Administration will manage to create two million jobs. 

The Inegi organized at the end of April the Telephone Survey of Occupation and Employment in the face of the health emergency and has called 14,294 households to find out about the employment situation in Mexico. The institution has warned that the data is preliminary and that due to the State’s request to stay home, the study was done by phone.

Source: elpais.com

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